January 21, 2011
When searching for investment capital for a small business in the form of angel investments, it is important to think about things from the position of your potential investor. If you were the angel investor, exactly what issues would likely persuade you to provide equity financing to the new venture?
Click here to Download Step-by-step Guide to Raising Capital from Angel Investors<==== Generally speaking, the 2 predominant factors tend to be markets along with management. Angel investors need to see that you're promoting your products or service to a big enough market in order to acquire an acceptable amount of revenue. Genuine revenue projections for any small business searching for angel funding can vary in scale from several hundred thousand dollars annually to several million dollars annually, over the following five years. Compare this to the earnings standard of many venture capitalists. Most try to find businesses with $50 to $100 million in revenue inside of five years. In addition to angel investors requiring a specific amount of revenue, they also want to invest in businesses that have credible and competent management. It is essential to portray oneself as a professional, and that you've been successful with your past endeavors. Angel investors also need to be confident in the other essential employees within your business. Angel investors additionally want to invest in businesses which will be in a position to create barriers to entry within their industry. A new venture presents a far more appealing investment if the possibility of new competition coming into the market is minimal. Reduced competition results in more earnings and higher profits. One more criteria angel investors utilize in order to screen potential startups is location. Naturally, it is sensible to invest in businesses that happen to be close by. This permits much more regular interaction between your new venture and the investor, who could possibly offer you assistance along with guidance for the business while it expands. Research has demonstrated that around 70% of angel investments take place within just 50 miles of the angel investor's locality. Find our how to attract Angel Investors <==== Above all, angel investors are seeking the opportunity of a liquidity event, an acquisition, or possibly a public offering. In the long run, it's these kinds of events that could provide a return on the initial investment. Above all, angel investors are usually most interested in the future liquidity potential of small businesses.
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